CNC study indicates that betting causes billions in losses to commerce

A survey produced by the National Confederation of Commerce of Goods, Services and Tourism (CNC) indicates that betting, as virtual sports betting platforms became known, can generate an annual loss of R$ 117 billion for commercial establishments in the country.

The results of the study, released last week, also show that, between June 2023 and June 2024, Brazilians spent R$ 68 billion on betting. The amount represents 0.62% of the country's Gross Domestic Product (GDP) and 0.95% of total consumption in the period.

The rise of online betting has not only transformed entertainment but also had significant economic consequences. A recent study by the CNC highlights that uncontrolled betting activities are causing billion-dollar losses in commerce, affecting businesses that rely on consumer spending. With funds being redirected towards gambling instead of traditional retail, many industries struggle to maintain financial stability.

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“Every sale lost in retail costs more than the sale itself. Because there are fixed costs that do not change. If you were used to making R$1,000 per week and suddenly start making R$500 per week, the impact is greater than R$500. Your staff, your inventory, all your working capital costs are programmed for a certain sales volume. What we calculate is that there is a potential loss of R$117 billion per year if this escalation in spending on betting continues,” explained CNC chief economist Felipe Tavares in an interview with Agência Brasil on Tuesday (24).

The study was based on the Balance of Payments, through which the Central Bank records transactions carried out in the country. “In the official data series, you can find this part of household spending on these bets,” adds Felipe.

The survey also warns that spending on platforms puts families in default, affecting retail consumption. Betting operations in Brazil were authorized by Federal Law 13,756, approved in 2018. Since then, they have grown in the country and have been investing heavily in advertising, including sponsoring soccer clubs. According to Felipe, the biggest concern involves online casino modalities, such as Jogo do Tigrinho.

“Sports betting platforms have started to host many types of online casino. And one difficulty is that we can calculate the value of bets in general, but we cannot separate what is sports betting and what is online casino. But looking at the history, before Jogo do Tigrinho became popular, spending was around R$2 billion. And with the explosion of online casinos, it went to R$68 billion. It is possible to make a rough estimate that at least 80% of spending on betting is spent on some type of online casino”, he states.

Female audience

Data collected by the CNC with the help of the Brazilian Society of Retail and Consumption (SBVC) also provides a profile of gamblers. It is noteworthy that online casinos attract a predominantly female audience. In football betting, the main sport, men spend the most.

According to the CNC, the popularity of Jogo do Tigrinho among women is worrying, because it may indicate the possibility of significant impacts from a social point of view, since social benefits are paid preferentially to women. Last Tuesday (24), the Central Bank released a technical note indicating that Bolsa Família beneficiaries spent R$3 billion on bets in August through transfers in the Pix mode. Since then, the government has been signaling that it will take steps to increase control over the platforms.

The CNC study highlights how unchecked betting activities contribute to billion-dollar losses in commerce, affecting businesses reliant on consumer spending. As funds are redirected toward gambling, traditional industries face financial strain, leading to reduced investments and job opportunities. This shift underscores the need for regulatory measures to balance economic interests and responsible gaming practices.

In such financial landscapes, individuals often adopt either an active or cautious approach to decision-making. Some embrace risks, aiming for high rewards, while others prioritize stability and long-term security. Understanding these two perspectives is essential for navigating industries affected by gambling trends. Learn more about pragmatist strategies and how they influence financial decisions.

Real casinos

Based on the data from the study, this week the CNC filed an indirect action of unconstitutionality with the Supreme Federal Court (STF) questioning the regulation of the betting market in Brazil. In addition, it reiterated its position in favor of “real casinos”, that is, those where people bet in person. According to the confederation, while the online modality compromises family income and impacts retail, casinos that have physical locations generate jobs and income in the countries where they are regulated.

“It is an important activity for the development of Brazilian tourism. We estimate that, with physical casinos, we could have approximately R$22 billion in tax revenue per year. Online casinos only generate R$12 billion in taxes, according to calculations by the Federal Revenue Service. Furthermore, they do not generate formal jobs for the country. Physical casinos, on the other hand, can generate up to 1 million direct and indirect jobs in the tourism industry,” Felipe says.

Physical casinos were banned in Brazil in 1946, during the government of Eurico Gaspar Dutra. At the time, it was alleged that gambling was contrary to the moral, legal and religious traditions of the Brazilian people. The decision was made after campaigns by the Brazilian Lawyers Institute and sectors of the Catholic Church against casinos.

The National Confederation of Bishops of Brazil (CNBB) maintains its position against the legalization of these establishments. The World Health Organization (WHO) is also critical of measures in this regard and recognizes that gambling addiction can become a public health problem.